Musk relinquishes Twitter takeover; social media app to bring a billionaire to justice

World’s richest man Elon Musk steps down $43 billion deal to buy the social media platform Twitter.

Musk filed with the Securities and Exchange Commission on Friday, 08/07, advising the regulator that it was terminating the agreement, arguing that Twitter had provided “false and misleading” statements that were in “material breach” of the agreement.

The statement reads: “For nearly two months, Mr. Musk has researched the data and information needed to ‘make an independent assessment of the prevalence of fake or spam accounts on Twitter’s platform. Twitter failed or refused to provide this information.

Twitter, which initially resisted the deal, now says it will “pursue legal action to enforce the merger agreement.”

While Twitter has repeatedly sought to assure investors and the public that spam accounts are under control, Musk’s camp has argued that hasn’t been enough to provide a reliable estimate of actual active users. The billionaire’s lawyers also pointed to the firing of two top executives, layoffs in talent acquisition and a hiring freeze as violations of the agreement.

Critics had argued that Musk’s attempt to buy Twitter was just a publicity stunt, and that he never really intended to close the deal based on a history littered with big broken promises by both Tesla and SpaceX.

Either way, the deal between Twitter and Musk has a break clause of US$1 billion that will be paid by the offending party, which will almost certainly be determined by the court.

Following Musk’s statement, he was reported that Twitter hired Wachtell, Lipton, Rosen & Katz and its founding partner, Martin Lipton, to represent it before the Delaware Court of Chancery. Lipton is notable for inventing the “poison pill” defense which Twitter initially used to try to avoid a hostile Musk takeover in the first place.

Twitter president Bret Taylor went on to tweeted“Twitter’s board of directors has agreed to complete the transaction at the price and terms agreed to with Mr. Musk and plans to pursue legal action to enforce the merger agreement. We are confident that we shall prevail in the Court of Chancery of Delaware.”

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